Correlation Between Xtrackers ShortDAX and Platinum Investment
Can any of the company-specific risk be diversified away by investing in both Xtrackers ShortDAX and Platinum Investment at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Xtrackers ShortDAX and Platinum Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers ShortDAX and Platinum Investment Management, you can compare the effects of market volatilities on Xtrackers ShortDAX and Platinum Investment and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Xtrackers ShortDAX with a short position of Platinum Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers ShortDAX and Platinum Investment.
Diversification Opportunities for Xtrackers ShortDAX and Platinum Investment
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Xtrackers and Platinum is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers ShortDAX and Platinum Investment Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Platinum Investment and Xtrackers ShortDAX is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Xtrackers ShortDAX are associated (or correlated) with Platinum Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Platinum Investment has no effect on the direction of Xtrackers ShortDAX i.e., Xtrackers ShortDAX and Platinum Investment go up and down completely randomly.
Pair Corralation between Xtrackers ShortDAX and Platinum Investment
Assuming the 90 days trading horizon Xtrackers ShortDAX is expected to generate 0.93 times more return on investment than Platinum Investment. However, Xtrackers ShortDAX is 1.07 times less risky than Platinum Investment. It trades about 0.04 of its potential returns per unit of risk. Platinum Investment Management is currently generating about -0.14 per unit of risk. If you would invest 83.00 in Xtrackers ShortDAX on August 31, 2024 and sell it today you would earn a total of 2.00 from holding Xtrackers ShortDAX or generate 2.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xtrackers ShortDAX vs. Platinum Investment Management
Performance |
| Timeline |
| Xtrackers ShortDAX |
| Platinum Investment |
Xtrackers ShortDAX and Platinum Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers ShortDAX and Platinum Investment
The main advantage of trading using opposite Xtrackers ShortDAX and Platinum Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers ShortDAX position performs unexpectedly, Platinum Investment can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Platinum Investment will offset losses from the drop in Platinum Investment's long position.| Xtrackers ShortDAX vs. Xtrackers II Global | Xtrackers ShortDAX vs. Xtrackers FTSE | Xtrackers ShortDAX vs. Xtrackers SP 500 | Xtrackers ShortDAX vs. Xtrackers MSCI |
| Platinum Investment vs. PSI Software AG | Platinum Investment vs. China BlueChemical | Platinum Investment vs. UPDATE SOFTWARE | Platinum Investment vs. VITEC SOFTWARE GROUP |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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